Answer choices are:
A) An ineffective price floor set above equilibrium
B) An effective price floor set below equilibrium
C) An ineffective price ceiling set above equilibrium
D) An effective price ceiling set below equilibrium
Answer:
A. An ineffective price floor set above the equilibrium.
Explanation:
A price floor is the lowest possible price at which a certain type of good is sold at. This is usually set by the government so as to keep the rate of goods from decreasing below a certain point. This price floor is indicated by a horizontal line on the graph above the intersection of the supply and demand curves.
